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That wraps up our initial coverage of Snowflake’s Q1 results. Thank you for stopping by!
Heading into the earnings report, four bear concerns dominated the debate for Snowflake. Here is how Q1 results scored each.
Bears will point to founder Benoit Dageville’s 1.17M-share April disposal and a 90x+ forward multiple. Bulls counter with NRR climbing to 126% and operating margin guided to 13.5%.
Overall Grade: A+.
Snowflake (NYSE:SNOW)’s Q1 FY27 report combined revenue reacceleration, a guidance raise, and a strategic AI roadmap that justified the stock’s 32% pop.
| Category | Grade | Notes |
|---|---|---|
| Revenue | A | $1.39B, +33.48% YoY; strongest sequential dollar growth ever. |
| EPS Beat | A | $0.39 vs $0.32 est; fourth straight beat. |
| Guidance | A+ | FY27 product revenue raised to $5.84B, +31%. |
| Margins | A- | Non-GAAP op margin guide lifted to 13.5%; GAAP still negative. |
| Cash Flow | B+ | FCF $232.8M, +26.93% YoY; OCF growth modest. |
| Mgmt Confidence | A | $300M buybacks, $6B AWS deal, Natoma acquisition. |
RPO of $9.21B, +38% YoY and NRR climbing to 126%, the first uptick in five quarters, validate the agentic AI thesis. Insider selling and a stretched forward multiple remain watch items.
Snowflake unveiled several major AI initiatives during the quarter, including a new $6 billion multi-year agreement with Amazon, a deeper partnership with OpenAI, and the acquisition of Natoma, an enterprise AI agent governance platform.
CEO Sridhar Ramaswamy said Snowflake is evolving from a trusted enterprise data platform into the “control plane for the agentic enterprise.”
Cortex Code is now being used across more than 7,100 accounts, while Snowflake Intelligence adoption more than doubled quarter over quarter, suggesting AI products are already becoming a meaningful driver of platform usage.
Snowflake said Q1 marked the strongest sequential dollar growth quarter in company history as product revenue growth re-accelerated to 34% year over year on a $4.5 billion revenue run rate. Management also raised full-year product revenue guidance as enterprise AI demand accelerated across the platform.
Net revenue retention also climbed to 126%, the first increase in five quarters, signaling customer consumption trends are strengthening again after several quarters of slowdown concerns.
Snowflake added 616 net new customers during the quarter, including 46 new $1 million-plus accounts and 13 new Forbes Global 2000 customers.
Snowflake’s consumption-based pricing model is suddenly looking a lot more attractive as AI workloads explode.
While much of the software industry is trying to transition away from traditional per-seat pricing, Snowflake already monetizes usage directly through data and compute consumption.
The company’s remaining performance obligations climbed to nearly $9.8 billion in fiscal Q4 FY2026, while net revenue retention remained a massive 125%, showing customers are still expanding spend aggressively on the platform.
Snowflake sits in an awkward spot where investors acknowledge the company’s AI and data-cloud opportunity, but still worry about slowing growth and the lack of GAAP profitability.
Revenue is still expected to grow roughly 27% this year, but the stock trades at more than 90x forward adjusted earnings while AI competition from companies like OpenAI and Anthropic continues to intensify.
The result is a stock that remains heavily debated despite strong customer retention, expanding RPO, and growing relevance in enterprise AI infrastructure.
Snowflake’s CEO Sridhar Ramaswamy takes the mic after the close. With shares at $174.69 and 45 buy ratings stacked up, the commentary matters more than the headline beat.
“AI Data Cloud,” “agentic AI,” “Cortex Code,” “Iceberg tables,” “single source of truth.”
Management’s own bar is $1.262–$1.267 billion in Q1 product revenue and a full-year FY2027 target of $5.66 billion (27% growth). Snowflake (NYSE:SNOW) guides conservatively, then raises, as it did when Q3 FY26 lifted the full-year bar to $4.45 billion.
Bullish path: FY27 product revenue raised above $5.66B, operating margin guided above 12.5%, NRR ticking up from 125%, and accelerating Cortex monetization commentary.
Bearish path: Q2 guide implying deceleration below 27%, NRR slipping, or flat margin guidance. Investors will scrutinize RPO (last quarter: $9.77B, +42%) as the cleanest forward-demand signal versus the $229.66 analyst target.
Polymarket’s earnings beat contract is now sitting at 94.5% Yes versus 5.5% No. That conviction tracks Snowflake (NYSE:SNOW)’s record: beats in 7 of the last 8 quarters, including a 18.5% surprise last quarter.
The product revenue ladder shows where the real debate lives. Crowd-implied odds: 98.6% above $1.25B, 92.5% above $1.275B, 59.0% above $1.30B, then a sharp drop to 16.5% above $1.325B.
Translation: Traders expect a beat near the guidance midpoint, not a blowout. With shares up 26.57% over the past month, the bar for a positive post-earnings reaction has quietly risen.
Snowflake Inc. (SNOW) has already beaten EPS expectations in every quarter of FY2026, so investors are now focused on whether AI demand is turning into real paid consumption growth.
The key debate centers on whether Snowflake can grow fast enough to support its 27% growth outlook and premium valuation, with analysts carrying targets near $230. This quarter could determine whether Snowflake’s “AI control plane” narrative continues compounding or starts losing credibility with investors.
Polymarket traders overwhelmingly expect another strong quarter, pricing in nearly 95% odds of a beat. Still, the real battleground may be product revenue, where markets appear confident Snowflake clears the low end of expectations but are less convinced the company can deliver a major upside surprise above the highest investor thresholds.
Live coverage has ended. The full story is below.
Investors are watching Snowflake (NYSE:SNOW | SNOW Price Prediction) ahead of its Q1 FY2027 results, expected tonight, May 27, after the bell at 4:05 PM ET. After a strong Q4 finish and a sharp recent rally, this report will test whether AI-driven consumption can sustain the company’s 27% growth guide.
Snowflake closed FY2026 with serious momentum. Q4 product revenue hit $1.23 billion, up 30% year-over-year, and remaining performance obligations jumped to $9.77 billion, up 42% YoY. Net revenue retention held at 125%, and the company added 740 net new customers, its strongest quarter on record.
Since that February 25 report, shares have moved in a wide arc. SNOW is up 26.57% over the past month to roughly $174.63, yet still down 19.04% year-to-date. The rebound reflects renewed conviction in CEO Sridhar Ramaswamy’s claim that “Snowflake sits at the center of the enterprise AI revolution.”
| Metric | Q1 FY27 Guide | YoY Growth |
|---|---|---|
| Product Revenue | $1,262M to $1,267M | 27% |
| Non-GAAP Operating Margin | 9.0% | n/a |
| FY27 Product Revenue | $5,660M | 27% |
| FY27 Non-GAAP Op Margin | 12.5% | n/a |
Polymarket traders price the probability of a beat at 94.5%, with 98.6% odds that product revenue clears $1.25B but only 59% above $1.30B.
I’ll be watching three things tonight closely. First, AI consumption: Snowflake Intelligence reached 2,500 accounts in three months, and 9,100+ accounts now use AI features. Cortex Code, the company’s AI coding agent, was already in 4,400+ customers at year-end. CEO Ramaswamy called it “the real game changer” for accelerating the data lifecycle. Translating that adoption into measurable consumption growth is the test.
Second, margins. The FY27 guide implies a non-GAAP operating margin jump to 12.5% from 10.5% in FY26, while absorbing a 150-basis-point free cash flow headwind from the $600 million Observe acquisition. CFO Brian Robins flagged that newer AI products carry lower gross margins, offset by efficiency in the core. Investors will look at whether Q1 operating leverage tracks the 9% guide cleanly.
Third, deal momentum. Q4 included Snowflake’s largest contract ever, at over $400 million, and seven nine-figure deals, versus two a year prior. RPO growth of 42%, well above current revenue growth, is the cleanest forward signal in the model. A reacceleration there could matter materially more than an earnings beat.
Contact [email protected] for any questions or corrections.
Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.
His work has also been featured on platforms including Seeking Alpha and Sure Dividend.
Outside of work, Thomas enjoys weight lifting and soccer.
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