Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

SNOW · Q1 2027 Earnings

Snowflake

Reported May 27, 2026

30-second summary

Product revenue of $1.334B grew 34% YoY, beating the $1.262–1.267B guide by ~$67M — the largest beat magnitude in the cycle and a clear re-acceleration from Q4's 30%. Management raised FY27 product revenue to $5.84B (+31% YoY, up from $5.66B/+27%) and lifted FY27 non-GAAP operating margin to 13.5% (up from 12.5%), explicitly citing Cortex Code ("COCO") as the largest single driver of the forecast lift. NRR ticked up to 126% — the first move off the four-quarter 125% plateau — and the agentic narrative has hardened from tailwind to active monetization.

Headline numbers

EPS

Q1 FY2027

$0.39

+21.9% vs est.

Revenue

Q1 FY2027

$1.39B

+33.0% YoY

+5.3% vs est.

Gross margin

Q1 FY2027

72.0%

Free cash flow

Q1 FY2027

$0.23B

Operating margin

Q1 FY2027

11.9%

Key financials

Q1 FY2027

Metric	Q1 FY2027	Q1 FY2026	YoY	Q4 FY2026	QoQ
Revenue	$1.39B	$1.04B	+33.4%	$1.28B	+8.3%
EPS	$0.39	$0.24	+62.5%	$0.32	+21.9%
Gross margin	72.0%	72.0%	+0bps	72.0%	+0bps
Operating margin	11.9%	9.0%	+290bps	11.0%	+90bps
Free cash flow	$0.23B	$0.18B	+27.3%	$0.77B	-69.5%

Guidance

Snowflake raised FY2027 product revenue guidance to $5.84B (31% YoY, up from $5.66B/27%) and full-year operating margin to 13.5% (up from 12.5%), driven by strong Q1 beats across revenue and margin metrics and accelerating AI momentum.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Product Revenue	Q1 FY2027	$1.262B–$1.267B (27% YoY)	$1.334B	+$0.067B–$0.072B above guidance; +7 percentage points above YoY guidance	Beat
Non-GAAP Product Gross Margin	Q1 FY2027	75.0%	75.1%	in-line	Met
Non-GAAP Operating Margin	Q1 FY2027	9.0%	11.9%	+2.9 percentage points above guidance	Beat

New guidance

Metric	Period	Guide	YoY
Product Revenue	Q2 FY2027	$1.415B–$1.420B (30% YoY)	+23.0%–+23.5% YoY
Non-GAAP Operating Margin	Q2 FY2027	12.5%	—
Non-GAAP Weighted-Average Shares (Diluted)	FY2027	376 million	—
Non-GAAP Weighted-Average Shares (Diluted)	Q2 FY2027	375 million	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Product Revenue	FY2027	$5.660B (27% YoY)	$5.840B (31% YoY)	+$0.180B; +4 percentage points YoY growth	Raised
Non-GAAP Operating Margin	FY2027	12.5%	13.5%	+1.0 percentage point	Raised
Observe Contribution to Product Revenue Growth	FY2027	approximately 1 percentage point	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Non-GAAP Product Gross Margin (75.0%), Non-GAAP Adjusted Free Cash Flow Margin (23.0%)

Segment performance

Q1 FY2027

Segment	Q1 FY2027	Q1 FY2026	YoY
Product Revenue	$1.334B	—	+34.0%
Professional Services and Other Revenue	$0.057B	—	+25.0%

Platform metrics

Q1 FY2027

Segment	Q1 FY2027	Q1 FY2026	YoY
Net Revenue Retention Rate	126%	124%	—
Customers with >$1M Trailing 12-Month Product Revenue	779	—	—
Net New Customers Added (Q1)	616	—	—
Forbes Global 2000 Customers	813	—	—
Remaining Performance Obligations	$9.21B	$6.7B	—
Accounts Using Snowflake AI Capabilities	13,600+	—	—

Profitability

Q1 FY2027

Segment	Q1 FY2027	Q1 FY2026	YoY
Product Gross Margin (Non-GAAP)	75.1%	—	—
Free Cash Flow Margin	16.7%	—	—

Management tone

Q2 FY26 → Q3 FY26 → Q4 FY26 → Q1 FY27: "AI as logo-acquisition engine" → "AI as quantified revenue stream" → "AI as the operating model" → "Agentic control plane as new TAM."

The agentic control plane shifted from product launch to market-claim. Last quarter Sridhar called Snowflake "uniquely positioned to become the control plane for the agentic era." This quarter the framing is no longer aspirational: "Q1 marks an important shift in this journey... positioning Snowflake to win a new market, the agentic control plane." The signal is that management views Q1 as the inflection — they are now claiming a new TAM, not preparing to compete for one. This is more aggressive than any Snowflake positioning language in the prior four quarters.

COCO collapsed from feature to forecast driver in one quarter. Q4 FY26 introduced Cortex Code as the "real game changer" with 4,400 customers — bulls and bears alike treated it as a narrative line. This quarter Brian disclosed that "COCO had the largest driver to the increase in our forecast... we had a very unique opportunity to layer COCO in the model, and that's reflected throughout the remainder of the year." Account count more than doubled to 7,100+. The Q4 watch list flagged the absence of concrete COCO adoption data as a risk — that gap closed decisively, and COCO is now the named driver of the FY27 raise.

AI shifted from "tailwind" to "monetization." Last quarter management still framed AI as enabling new logos; this quarter Sridhar explicitly bifurcated: "We are benefiting from AI as a secular tailwind while also monetizing first-party AI capabilities." This is the cleanest articulation yet that Snowflake views AI as two distinct revenue streams — incremental consumption on core data infrastructure plus direct monetization of Cortex/COCO/Intelligence — and management's confidence in the second leg is now high enough to anchor a guide raise on it.

Internal AI productivity went from anecdote to operating model. Q3 FY26 mentioned AI tools in passing. This quarter it's the explanation for the entire operating margin beat: 17 organic hires vs. ~400 a year ago, and Sridhar's claim that "use cases won per account executive increased 86% year over year." This is the most concrete internal-productivity disclosure Snowflake has made and the mechanism behind the 100bps FY27 operating margin raise — it's not cost-cutting, it's compounding output per head.

Backlog clearance is now framed as a velocity advantage, not a hygiene metric. Sridhar's line that migration timelines now run "between a quarter and two quarters" vs. the traditional 2-year norm is a step-change from Q4's general "migration acceleration" framing. The implication is that consumption pull-forward from faster deployment is a new structural tailwind to NRR — which lines up with the 126% print this quarter.

Recurring themes management leaned on this quarter:

Agentic control plane as new $TAM and monetization opportunityCOCO-driven consumption flywheel accelerating core platform adoptionInternal productivity transformation enabling margin expansion with minimal hiringGovernance and enterprise trust as defensible moat vs. AI labs and cloud providersRapid backlog clearance unlocking customer expectations and faster deployment cyclesModel choice and customer independence as strategic positioning advantage

Risks management surfaced:

Cost governance of AI products (token spend, governance throttling) at scaleCompetition from cloud providers and AI labs improving capabilitiesQ4 bookings concentration risk ('we expect bookings to be increasingly weighted towards the fourth quarter')Observe acquisition integration headwinds (~150 bps margin impact)Natoma acquisition integration and governance execution in workflow automation

Answers to last quarter's watch list

Whether Q1 FY27 product revenue beats $1.262–1.267B by at least ~$25M — Decisively resolved. Q1 product revenue printed $1.334B, a ~$67M beat at the high end of the guide — well above the $40M+ threshold that would "re-establish the pattern and make the FY27 +27% guide look conservative." The FY27 raise to 31% growth confirms it.

Resolved positively

Whether gross margin holds the 75% FY27 guide — Q1 non-GAAP product gross margin printed 75.1%, +10bps above the guide. The FY27 75.0% guide was reaffirmed. AI workload mix is not visibly dragging margin.

Resolved positively

Whether NRR breaks the 125% pattern — NRR ticked up to 126% — the first move off the four-quarter 125% plateau. Not yet the >127% level that would decisively validate AI as incremental spend on top of existing consumption, but the direction is right and the per-user caps management announced last quarter have not capped the expansion math.

Continue monitoring

Cortex Code revenue or adoption disclosure — Resolved. COCO account count went from 4,400 to 7,100+ (+61% QoQ) and Brian explicitly named COCO as the largest single driver of the FY27 forecast raise. The disclosure is qualitative (no ARR figure), but the linkage between COCO adoption and the $180M FY27 raise is the most concrete AI-attribution data Snowflake has provided.

Resolved positively

Observe integration tracking against the ~1pp FY27 contribution guide — Not resolved cleanly. The ~1pp FY27 Observe contribution guide was withdrawn this quarter without a replacement figure. Overall FY27 growth was raised by 400bps (4x the original Observe contribution), so the withdrawal is benign in context, but the discrete yardstick is gone.

Not resolved

What to watch into next quarter

Whether Q2 FY27 product revenue beats $1.415–1.420B by at least $50M — Q1's $67M beat is the new reference. A sub-$30M beat would mark the first real moderation in the FY27 setup; $60M+ would force another mid-year FY raise.

NRR direction: 126% → 127%+ or back to 125% — Q1's 1-point uptick is the first directional move in five quarters. Sustaining 126% confirms agentic consumption is additive; a slip back to 125% would suggest Q1 was a one-quarter pull-forward from accelerated backlog clearance.

Whether the verbal "30% YoY" Q2 guide reconciles to the dollar range — the $1.415–1.420B guide implies ~23% YoY against the Q2 FY26 product revenue base of $1.15B, not 30%. Either the implied math runs hot in the actual print (Q2 product revenue >$1.45B), or the framing reconciles against a different comparable. The reconciliation matters because it determines whether management is sandbagging or whether the "30%" framing is anchoring on a non-product-revenue base.

Whether Observe contribution gets re-disclosed in dollar terms — the withdrawn ~1pp/~$45M FY27 contribution guide leaves a measurable hole. A re-disclosure in Q2 (even at a different level) restores the integration scorecard; another quarter of silence makes Observe untrackable separately from organic growth.

Whether COCO gets a quantified contribution disclosure — management named COCO as the largest single driver of the $180M FY27 raise but did not put a dollar figure on it. A Q2 disclosure of COCO ARR or % of bookings would harden the bull case; continued qualitative framing leaves the COCO contribution unauditable.

FY27 operating margin trajectory — Q1 printed 11.9% vs. 9.0% guide; FY27 raised to 13.5%. Q2's 12.5% margin guide implies sequential compression that management has historically beaten by 200–300bps. A Q2 print above 14% would set up another FY operating margin raise.

Sources

Snowflake Q1 FY2027 Press Release & Financial Statements — https://www.sec.gov/Archives/edgar/data/1640147/000164014726000027/fy2027q1earnings.htm

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