Snowflake Q1 Earnings Are Out – Stock Rips 25% on Natoma Acquisition and $6B Amazon Deal

That wraps up our initial coverage of Snowflake’s Q1 results. Thank you for stopping by!

Four Surprises That Weren’t Priced In

1. Guidance raise blew past the bar. FY27 product revenue lifted to $5.84B (31% growth) from the prior $5.66B (27%), with operating margin guided to 13.5% from 12.5%. Consensus wasn’t modeling acceleration.
2. The $1.30B product revenue cliff cleared decisively. Polymarket gave only 53% odds of clearing $1.30B; actual product revenue landed at $1.33B, up 34% YoY. RPO surged to $9.21B, up 38%, and NRR ticked up to 126%.
3. The $6B AWS pact and Natoma deal. A multi-year $6 billion AWS collaboration plus the Natoma agentic-AI acquisition reframe the AI monetization story.
4. Profitability still leaks. GAAP operating loss of -$326.15M and shareholders’ equity down 19.45% YoY show SBC dilution persists, explaining why insiders sold heavily at $175-$176 on May 19.

Bear Case: Validated or Busted?

Heading into the earnings report, four bear concerns dominated the debate for Snowflake. Here is how Q1 results scored each.

• Decelerating growth: Busted. Product revenue re-accelerated to +34% YoY, with FY27 guidance raised to $5.84B (31% growth).
• AI monetization unclear: Busted. 13,600+ accounts use Snowflake AI, and RPO hit $9.21B, +38% YoY.
• GAAP losses & SBC: Validated. A -$326M GAAP operating loss persists.
• Competitive pressure: Mixed. The $6B AWS deal and deepened OpenAI tie suggest moat strength.

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.

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.

Top 5 Analyst Questions

• Is the 27% FY2027 product revenue guide conservative given Q4 momentum?
• Cortex and Snowflake Intelligence: when does AI become a measurable revenue line?
• Can net-new customer adds sustain after a record 740 in Q4?
• Observe integration: timeline to revenue in the $50B+ observability TAM?
• Path to GAAP profitability with $423M Q4 stock-based comp?

Buzzwords to Track

“AI Data Cloud,” “agentic AI,” “Cortex Code,” “Iceberg tables,” “single source of truth.”

Red Flags

• NRR slipping below 125%
• RPO growth deceleration from +42% YoY
• Soft Q2 guide or consumption optimization commentary
• Updates on pending 2024 securities class action

Guidance Will Decide the Reaction, Not the Q1 Beat

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.

What the Crowd Is Pricing Into Tonight’s Earnings Report

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.