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

SNOW · Q4 2026 Earnings

Snowflake

Reported February 25, 2026

30-second summary

Snowflake closed FY26 with product revenue of $1.227B in Q4 (+30% YoY), beating the $1.195–1.200B guide by ~$27M, and posted Q4 operating margin of 11% — 400bps above the 7% guide that drew most of the bear attention last quarter. Management's opening FY27 frame is product revenue of $5.66B (+27% YoY) with operating margin stepping to 12.5% and gross margin guided to 75%, decisively rejecting the "AI investment cycle compresses margins" thesis. RPO accelerated to $9.77B (+42% YoY), the widest gap to product revenue growth in the cycle.

Headline numbers

EPS

Q4 FY2026

$0.32

Revenue

Q4 FY2026

$1.28B

+30.0% YoY

Gross margin

Q4 FY2026

72.0%

Free cash flow

Q4 FY2026

$0.77B

Operating margin

Q4 FY2026

11.0%

Key financials

Q4 FY2026

Metric	Q4 FY2026	YoY	Q3 FY2026	QoQ
Revenue	$1.28B	+30.0%	$1.21B	+5.9%
EPS	$0.32	—	$0.35	-8.6%
Gross margin	72.0%	—	67.7%	+430bps
Operating margin	11.0%	—	-27.2%	+3820bps
Free cash flow	$0.77B	—	$0.11B	+571.1%

Guidance

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	Q4 FY2026	$1.195B - $1.200B	$1.227B	+$0.027B - $0.032B above guide	Beat
Product Revenue YoY Growth	Q4 FY2026	27% YoY	30% YoY	+3 percentage points above guide	Beat
Operating Margin (Non-GAAP)	Q4 FY2026	7%	11%	+4 percentage points above guide	Beat
Product Revenue	FY2026	$4.446B	$4.684B	+$0.238B above guide	Beat
Product Revenue YoY Growth	FY2026	28% YoY	29% YoY	+1 percentage point above guide	Beat
Product Gross Profit Margin (Non-GAAP)	FY2026	75%	72%	-3 percentage points below guide	Met
Operating Margin (Non-GAAP)	FY2026	9%	10%	+1 percentage point above guide	Beat
Adjusted Free Cash Flow Margin (Non-GAAP)	FY2026	25%	24%	-1 percentage point below guide	Met

New guidance

Metric	Period	Guide	YoY
Product Revenue	Q1 FY2027	$1.262B - $1.267B	+21.3% to +21.8% YoY
Product Revenue YoY Growth	Q1 FY2027	27% YoY	—
Product Gross Profit Margin (Non-GAAP)	Q1 FY2027	75.0%	—
Operating Margin (Non-GAAP)	Q1 FY2027	9.0%	—

Segment performance

Q4 FY2026

Segment	Q4 FY2026	YoY
Product Revenue	$1.227B	+30.0%

Platform metrics

Q4 FY2026

Segment	Q4 FY2026
Net Revenue Retention Rate	125%
Customers with >$1M Trailing 12-Month Product Revenue	733
Customers with >$1M YoY Growth	27%
Net New Customer Additions (Q4)	740
Net New Customer Additions YoY Growth	40%
Remaining Performance Obligations (RPO)	$9.77B
RPO YoY Growth	42%
Forbes Global 2000 Customers	790

Management tone

Q1 FY26 → Q2 → Q3 → Q4 anchor: "AI as foundational pillar" → "AI as logo-acquisition engine" → "AI as quantified revenue stream" → "AI as the operating model."

AI moved from a discrete revenue stream to the framing of the entire enterprise. Three quarters ago Cortex was a "foundational pillar"; two quarters ago AI influenced 50% of new logos; last quarter the $100M AI run rate became the first hard dollar disclosure. This quarter the framing collapsed the distinction: "A year ago, we were talking about the promise of AI. Today that promise is real and Snowflake sits at the center of the enterprise AI revolution." The shift signals that management no longer views AI as a separable product line — it's how the platform is sold.

Cortex Code was elevated from feature to inflection point in the Q&A. Responding to Sanjit Singh (Morgan Stanley), Sridhar said "Cortex Code is the real game changer for us because it is a massive accelerant for every part of the data lifecycle." The CEO is now anchoring the FY27 growth narrative on a specific product rather than a general AI tailwind, which raises both the upside (if it lands) and the execution risk (if it doesn't ramp). Cortex Code is already in use by over 4,400 customers.

The platform pitch widened to "control plane for the agentic era." In prepared remarks, Sridhar said "Snowflake is uniquely positioned to become the control plane for the agentic era." Separately, in describing the general availability of Snowflake Postgres, he said it "transforms Snowflake from a system you analyze with into a platform that you build on." Combined with OpenFlow and the Observe acquisition (guided to contribute ~1pp of FY27 product revenue growth), the product surface continues widening into adjacent territory.

The consumption-unpredictability risk was acknowledged with a concrete mitigation. In response to Raimo Lenschow's line (Barclays, via Sheldon McMean), Sridhar disclosed a forthcoming per-user cap on Snowflake Intelligence so customers "can feel like there is a clear upper limit to how much they can get charged with an agent." This is the first time management has acknowledged the customer-side risk of agentic consumption by name and committed to a product-level response — a signal that agent monetization is real enough to warrant friction-reduction features.

Operating leverage formalized into the FY27 frame. FY26 non-GAAP operating margin reached 10.5% (+400bps YoY per CFO), and FY27 guides to 12.5% (+200bps YoY). Stock-based compensation declined from 41% of revenue in FY25 to 34% in FY26, with management guiding to 27% in FY27 — a multi-year compression story that supports the operating margin glide path.

Recurring themes management leaned on this quarter:

AI agents and agentic workflows as primary growth vectorCortex Code as transformational accelerant across entire data lifecycleEnterprise data governance and trusted AI as competitive moatConsumption-based pricing with predictability controls for agentsPlatform expansion from analytics to application building (Postgres, OpenFlow)Operational efficiency gains through internal AI deployment

Risks management surfaced:

Customer sticker shock from unpredictable AI agent consumptionObservability market consolidation and competitionExecution risk on new product integrations (Observe, Postgres, OpenFlow)Geopolitical and macroeconomic uncertainties (standard forward-looking language)Competition from other AI platforms claiming agentic capabilities

Answers to last quarter's watch list

Whether Q4 product revenue beats $1.195–1.200B by at least ~$25M — Q4 product revenue printed $1.227B, a $27M beat at the high end. That's directly at the reference threshold from last quarter's note — not a re-acceleration to Q2's $50M magnitude, but not the moderation a sub-$20M beat would have signaled. The "beat plus more" cadence holds.

Resolved positively

Whether the Q4 operating margin guide of 7% holds or surprises higher — Q4 printed 11%, matching Q3 and 400bps above guide. The 7% guide was sandbag; operating leverage is fully intact through the Anthropic commitment and AI investment cycle. The bear setup on margin compression has been decisively rejected.

Resolved positively

AI revenue run rate progression beyond $100M — Not called out as a specific dollar figure on this print. Management did not refresh the $100M run rate disclosure; instead, the AI narrative was reframed as inseparable from total product revenue (Cortex Code as accelerant across the lifecycle, Snowflake Intelligence at ~2,500 accounts, 9,100+ accounts using AI features). This is a regression in discrete-dollar disclosure transparency — bulls who wanted a quarterly AI revenue cadence don't get one.

Not resolved

NRR break in either direction — Held at 125% for the fourth consecutive quarter. Neither the bull thesis (break above 127%) nor the bear thesis (slip below 124%) is validated. With AI now framed as the operating model, the absence of NRR expansion is the most pointed tension in the print.

Continue monitoring

FY27 initial framing on the Q4 call — Resolved. FY27 product revenue guided to $5.66B (+27% YoY), operating margin to 12.5% (+200bps YoY), gross margin at 75%, FCF margin 23% (with ~150bps headwind from the Observe acquisition). The FY27 +27% guide matches the FY26 closing growth rate within ~200bps, signaling management views the consumption acceleration as durable.

Resolved positively

What to watch into next quarter

Whether Q1 FY27 product revenue beats $1.262–1.267B by at least ~$25M — the FY26 sandbag cadence implies a $30–50M Q1 beat. A sub-$20M beat would be the first real signal of moderation; a $40M+ beat re-establishes the pattern and makes the FY27 +27% guide look conservative.

Whether gross margin holds the 75% FY27 guide — FY26 printed 76% non-GAAP product gross margin, above the 75% guide. Q1 FY27 gross margin holding at or above 75% would confirm AI workload mix is not a drag; sub-74% would raise questions on FY27 mix dynamics.

Whether NRR breaks the 125% pattern — four consecutive quarters at 125% is now structural, not a hold. Q1 needs to resolve whether agentic consumption layers on top of existing spend (NRR above 127%) or whether the per-user caps management just announced cap the expansion math.

Cortex Code revenue or adoption disclosure — management framed Cortex Code as the "real game changer" for FY27, with 4,400 customers already using it. A concrete adoption metric (ARR or % of bookings) in Q1 would back the framing; the absence of one would suggest the language is running ahead of the data, similar to the AI run-rate disclosure regression this quarter.

Observe integration tracking against the ~1pp FY27 contribution guide — management committed to a specific Observe contribution of ~1 percentage point of FY27 product revenue growth (~$45M), with 178 employees added in Q1. Q1 will be the first data point on whether the integration is on track or already running ahead/behind, and whether the ~150bps FCF margin headwind lands as guided.

Sources

Snowflake Q4 FY2026 Press Release & Financial Statements — https://www.sec.gov/Archives/edgar/data/1640147/000162828026011631/fy2026q4earnings.htm
Snowflake Q4 FY2026 Earnings Call Transcript (prepared remarks and Q&A)

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