Snowflake Inc (SNOW) Q1 2026 Earnings Call Transcript

Bullish Software - Application 56.83B USA

Next Earnings

2026-05-19

Snowflake Inc. provides a cloud-based data platform for various organizations in the United States and internationally. The company's platform includes artificial intelligence (AI) Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data applications, and share data and data products, as well as applies AI for solving business problems. It serves financial services, advertising, media and entertainment, retail and consumer goods, healthcare and life sciences, manufacturing, technology, telecom, travel and hospitality, and government and defense industries, as well as the public sector. The company was formerly known as Snowflake Computing, Inc. and changed its name to Snowflake Inc. in April 2019. Snowflake Inc. was incorporated in 2012 and is based in Bozeman, Montana.

Snowflake delivered 30% Q4 product revenue growth, record bookings including a >$400M deal, and accelerating AI-enabled expansion, with guidance for 27% revenue growth in FY27 and margin expansion alongside the Observe integration.

⭐ Key Highlights

Strong AI-driven revenue growth

Q4 product revenue grew 30% YoY to $1.23B, with AI workloads contributing meaningfully to growth.

Record bookings and large multi-year deals

Q4 signed a largest-ever deal (> $400M) and 7 nine-figure contracts, driving robust RPO growth (to $9.77B, +42%).

AI product momentum expands customer base

Snowflake Intelligence surpassed 9,100 accounts with AI usage, and over 2,500 accounts using Snowflake Intelligence within 3 months of launch.

Operational efficiency and margin progress

FY26 non-GAAP operating margin reached 10.5% (up ~400 bp YoY) with SBC down to 34% of revenue; expect continued margin expansion in FY27.

Acquire/expand ecosystem and product velocity

Closed Observe acquisition (~$600M) to extend observability and IT operations, plus 430+ product capabilities launched this year; partnerships with SAP, Anthropic, OpenAI, and Google Cloud broaden model availability.

✔Positive Signals

Record high bookings including >$400M deal and multiple nine-figure contracts
AI-driven growth: 9,100+ accounts using Snowflake Intelligence, 2,500+ AI-enabled accounts in early rollout
SBC improvement and margin expansion (FY26 non-GAAP OPM 10.5%)
Observe acquisition positioned to unlock expansion in IT operations and observability
Strong cash position and ongoing share repurchase program

✖Negative Signals

FY27 gross margin guidance steady at 75% with AI investments implying near-term margin pressure
Observe acquisition adds ~150bp headwind to FY27 free cash flow margin
Bookings and AI-driven consumption remain sensitive to customer adoption and consumption patterns
Some reliance on Q4 weighting for bookings cadence in FY27 (seasonality) could imply quarterly volatility
Sustained 27% revenue growth guidance assumes continued AI workload contribution and customer retention

📊Financial Results

Q4 product revenue +30% YoY to $1.23B
RPO $9.77B, +42% YoY
FY26 non-GAAP operating margin 10.5%, +400 bp YoY
SBC as a % of revenue declined to 34% (from 41% in FY25)
Cash and equivalents/Investments = $4.8B; $150M of share repurchases in Q4

🔮Future Guidance

Q1 product revenue guidance: $1.262B–$1.267B (27% YoY growth)
FY27 product revenue: ~ $5.66B (27% YoY growth), with Observe contributing ~1 percentage point of growth
FY27 non-GAAP gross margin: 75%
FY27 non-GAAP operating margin: 12.5%
FY27 non-GAAP adjusted free cash flow margin: ~23% (includes ~150bp headwind from Observe); bookings remain weighted to Q4

💡Interesting Insights

Sridhar highlighted interoperable data strategy and openness to multiple model providers, while Cortex Code accelerates deployment and developer productivity, effectively turning Snowflake into a central agent platform with 4–10x deployment speed improvements.

Detailed Analysis

AI-generated summary of Snowflake Inc earnings call transcript.

Snowflake's Q4 FY2026 results underscore a transformative year where AI-native capabilities—Snowflake Intelligence and Cortex Code—prove the platform as the enterprise AI foundation. The company posted 30% product revenue growth to $1.23B, with remaining performance obligations at $9.77B (+42%), and a steady net revenue retention of 125%. The close of the Observe acquisition and a wave of AI-driven product releases fueled substantial bookings momentum, including a record single contract (> $400M) and 7 nine-figure deals. Snowflake added 2,332 net new customers and now serves over 9,100 AI-enabled accounts, with Snowflake Intelligence deployed across 2,500+ accounts within three months of launch. Financially, FY26 non-GAAP operating margin rose to 10.5% as the company sharpened efficiency (SBC declined to 34% of revenue from 41%), while maintaining a strong balance sheet with $4.8B in cash and $150M of share repurchases in Q4. For FY27, Snowflake guided product revenue to about $5.66B (27% YoY) with a 75% non-GAAP gross margin, 12.5% non-GAAP operating margin, and ~23% non-GAAP free cash flow margin, incorporating roughly 1 percentage point of contribution from the Observe acquisition and noting seasonality that similar to FY26 will skew bookings to Q4. Management emphasizes continued product velocity, a stable guidance philosophy, and a vision to scale AI-native workflows while preserving enterprise governance and security.

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