Snowflake Inc.

What they do

Snowflake delivers the AI Data Cloud, a platform built on three major public clouds across 55 regional deployments. The platform ingests structured, semi-structured, and unstructured data into a storage layer, provides dedicated compute resources, and offers cloud services for secure AI use. Customers pay based on consumption of compute, storage, and data transfer resources, typically under one-to-four-year capacity arrangements or on-demand monthly plans.

Revenue drivers

• Product revenue — The primary revenue stream, generated from compute, storage, and data transfer consumption. Q1 FY2027 product revenue was $1.33 billion, up 34% year-over-year.
• AI products — Snowflake Intelligence and Cortex Code are first-party AI offerings gaining traction; more than 13,600 accounts use Snowflake AI capabilities, and Cortex Code is used in over 7,100 accounts.
• Customer expansion — Net revenue retention rate was 126% in Q1 FY2027, indicating strong existing customer consumption growth. 779 customers have trailing 12-month product revenue over $1 million.
• Partnerships — Expanded collaboration with AWS through a new $6 billion multi-year agreement, and deepened partnership with OpenAI, which could drive additional platform consumption.

Recent performance

For Q1 FY2027 (ended April 30, 2026), Snowflake reported revenue of $1.39 billion, up 33% year-over-year. Product revenue was $1.33 billion, up 34%. Remaining performance obligations were $9.21 billion, up 38% year-over-year. The company added 616 net new customers, including 13 new Forbes Global 2000 customers. Financial performance for fiscal 2026 showed annual revenue of $4.68 billion, with a net loss of $1.33 billion and operating cash flow of $1.22 billion.

Strategy

Snowflake is focusing on becoming the 'control plane for the Agentic Enterprise' by extending its platform with AI capabilities such as Snowflake Intelligence and Cortex Code. The company is investing in native application development and expanding partnerships with major cloud providers and AI companies like AWS and OpenAI. It also signed a definitive agreement to acquire Natoma, an enterprise Model Context Protocol platform, to extend governance to AI-driven workflows. Management is raising full-year product revenue guidance due to AI-driven momentum.

Risks

• Limited operating history and rapid growth — The company's rapid revenue growth and limited history make it difficult to forecast future results, as noted in risk factors.
• Competition and technology changes — Increased competition and changes in technology, such as the rising prominence of AI, could slow revenue growth or cause declines.
• Macroeconomic conditions — Unstable macroeconomic conditions could adversely affect customer consumption and spending, impacting revenue.
• Reliance on public cloud infrastructure — The platform depends on three major public clouds; disruptions or performance problems could harm the business.

Outlook

For Q2 FY2027, Snowflake expects product revenue of $1,415 million to $1,420 million, representing 30% year-over-year growth. For full-year fiscal 2027, the company raised product revenue guidance to $5.84 billion, up 31% year-over-year, from previous guidance of $5.66 billion. Non-GAAP operating margin is expected to be 13.5% for the full year, up from prior guidance of 12.5%.