Snowflake Inc (NYSE:SNOW) shares jumped 23% in after-hours trading Wednesday after the cloud data company posted second-quarter results that beat Wall Street estimates and raised its full-year guidance.
The company reported fiscal 2027 second-quarter revenue of $1.55 billion, up 35% year-over-year and above the $1.48 billion analysts had expected. Adjusted earnings per share came in at $0.62, topping estimates of $0.45.
"AI continues to compound our advantages, creating a flywheel effect across the business," CEO Sridhar Ramaswamy said. "CoWork and CoCo are driving transformational outcomes for our customers, while fueling rapid adoption, user growth, new workloads, and overall platform consumption.”
Product revenue rose 37% year-over-year to $1.49 billion, while non-GAAP operating income reached $237 million, well ahead of the $187 million estimate. Non-GAAP product gross margin was 75%. Free cash flow totaled $83.8 million, below the $104 million analysts had forecast.
Snowflake raised its fiscal 2027 guidance, now projecting product revenue of $6.07 billion, up from a prior forecast of $5.84 billion. The company also lifted its non-GAAP operating margin guidance to 14.5% from 13.5%, and guided to a non-GAAP product gross margin of 74% and an adjusted free cash flow margin of 23%.
For the third quarter, Snowflake guided to product revenue of $1.588 billion to $1.593 billion, with a non-GAAP operating margin of 15.5% and diluted shares of 382 million.
“Our rapid pace of innovation, tight go-to-market execution, and operational discipline position us well to capture the opportunity ahead,” Ramaswamy added.
Other second-quarter metrics included a net revenue retention rate of 126%, remaining performance obligations of $9.0 billion, up 30% year-over-year, and 828 customers generating more than $1 million in trailing 12-month product revenue, a 27% increase year-over-year.