Snowflake Inc. · Q2 FY2027 call

Product revenue came in at $1.49 billion, with growth accelerating to 37% year-over-year, marking our second consecutive quarter of record sequential dollar growth. After exiting Q4 of last fiscal year at 30% year-over-year growth, we have now added 7 points of acceleration in just 2 quarters.

First, AI is bringing new workloads onto the platform. […] Second, our first-party AI products, CoCo and CoWork, continue to see rapid adoption. As customers build and deploy agents on Snowflake, we are expanding our role into the agentic control plane and creating new opportunities for growth. Third, AI activation continues to lift overall platform consumption. Customers using AI on Snowflake consume more across the data platform, creating a structural multiplier for our business.

Snowflake now provides the data and AI foundation for 14,554 customers around the world.

In fact, 65 customers have now crossed $10 million in trailing 12-month product revenue, demonstrating how our largest customers continue to go all in on Snowflake.

CoWork expanded to 5,800 accounts, up nearly 11% quarter-over-quarter. Meanwhile, CoCo continues to see rapid adoption, surpassing 9,100 accounts and adding more than 2,000 net new accounts in this quarter alone.

For example, in our marketing organization, CoCo has helped bring search optimization in-house, eliminating $400,000 in annual agency spend, reducing keyword research from approximately 10 hours to 20 minutes, and content production from an estimated 24 hours down to just two. In finance, our long-range planning used to require a three-person team and more than 50 spreadsheets. It now runs with one analyst and a series of models that reflect our pricing structure and consumption dynamics.

The number of use cases, individual customer projects deployed on Snowflake increased 89% year over year as customers moved more workloads into production. At the same time, use cases won per account executive increased 43% year over year, demonstrating both growing customer demand and strong sales productivity.

We remain on track for GAAP profitability in Q4 fiscal 2028, and the operating leverage we build along the way strengthens the durability of that outcome.

In Q2, product revenue once again accelerated to reach 37% year-over-year growth. This marks our third straight quarter of acceleration. Q2 benefited from continued strength in our core data platform business and a meaningful step-up in AI revenue.

Remaining performance obligations grew 30% year over year, totaling $9 billion. As a reminder, we continue to see customers favor Q4 renewals. As a result, we expect bookings to be increasingly weighted towards the fourth quarter. Of the $9 billion RPO, we expect approximately 54% to be recognized as revenue in the next 12 months.

In Q2, non-GAAP operating margin expanded over 400 basis points year over year to reach 15%. Our outperformance was driven by strong revenue growth and disciplined headcount management.

Year to date, we have added 334 employees, which includes 173 from our Observe acquisition. This compares to 935 added in the year-ago period.

For FY 2027, we now expect product revenue of $6.07 billion, representing 36% year-over-year growth. This includes approximately one percentage point of growth from Observe, consistent with our previous outlook.

This revised outlook includes a higher revenue mix from fast-growing AI workloads, which carry a lower contribution margin today. We are delivering continued operating margin expansion as we offset growing cloud costs with slowing headcount expense.