Snowflake Reports Strong Q2 2026 Revenue and Exceeds EPS Estimates

Snowflake (SNOW.US) reported strong financial results for the second quarter of fiscal year 2026, with product revenue reaching $1.09 billion, marking a 32% year-over-year increase. The company's non-GAAP operating income was $127.57 million, translating to an 11% operating margin. This performance aligns with analyst expectations for revenue and exceeds the estimated EPS of $0.26 by reporting a non-GAAP diluted EPS of $0.35.

Key Business Drivers

Snowflake's growth was primarily driven by a substantial increase in product revenue and an expanding customer base. The company reported 654 customers with trailing 12-month product revenue exceeding $1 million, representing a 30% year-over-year growth. Additionally, 751 Forbes Global 2000 customers are now utilizing Snowflake’s platform.

The net revenue retention rate stood at 125%, indicating strong customer satisfaction and increased platform consumption. Remaining performance obligations also saw significant growth, reaching $6.9 billion, a 33% increase year-over-year. These metrics highlight the continued adoption and deepening engagement of customers with Snowflake’s AI Data Cloud.

Management Outlook

For the third quarter of fiscal 2026, Snowflake anticipates product revenue to be between $1.125 billion and $1.130 billion, reflecting a projected year-over-year growth of 25% to 26%. The company also forecasts a non-GAAP operating margin of 9% for the upcoming quarter.

For the full fiscal year 2026, product revenue is expected to reach $4.395 billion, representing a 27% year-over-year growth. Management projects a non-GAAP product gross profit margin of 75% and a non-GAAP operating margin of 9% for the full year, alongside an adjusted free cash flow margin of 25%.