tapebrief
SNOW · Q3 2026

SNOW · Q4 2026 Earnings

Bullish

Snowflake

Reported February 25, 2026

30-second summary

Snowflake closed FY26 with Q4 product revenue of $1.227B (+30% YoY) — a $27M beat vs. the high end of the $1.195–1.200B guide and a re-acceleration from Q3's 29%. Q4 non-GAAP operating margin printed 11%, a stunning 400bps above the 7% guide that had been the central tension in last quarter's print, validating the bull read that the Q4 operating margin guide was sandbag. Q4 non-GAAP product gross margin held at 75% in line with guide, and FY26 product gross margin came in at ~76% (slightly above the 75% guide) — the bear thesis on AI-driven gross margin compression does not show up in the print. FY27 product revenue is guided to $5.66B (+27% YoY) off a $4.47B FY26 product revenue base, a modest deceleration from FY26's 29% actual; with Observe contributing ~1pt, organic FY27 growth is ~26%. The company disclosed its first $400M+ deal and seven nine-figure contracts in the quarter (vs. two prior year).

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
MetricQ4 FY2026YoYQ3 FY2026QoQ
Revenue$1.28B+30.0%$1.21B+5.5%
EPS$0.32—$0.35-8.6%
Gross margin72.0%—67.7%+430bps
Operating margin11.0%—-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

MetricPeriodPrior guideActualΔResult
Product RevenueQ4 FY2026$1,195 - $1,200$1,227+$0.027 - $0.032B above guideBeat
Product Revenue YoY GrowthQ4 FY202627%30%+3 percentage points above guideBeat
Non-GAAP Operating Income MarginQ4 FY20267%11%+4 percentage points above guideBeat
Product RevenueFY2026$4,446$4,68+$0.234B above guideBeat
Product Revenue YoY GrowthFY202628%29%+1 percentage point above guideBeat
Non-GAAP Operating Income MarginFY20269%10%+1 percentage point above guideBeat

New guidance

MetricPeriodGuideYoY
Product RevenueQ1 FY2027$1,262 - $1,267+21.3% to +21.8% YoY
Product Revenue YoY GrowthQ1 FY202727%—
Non-GAAP Product Gross Profit MarginQ1 FY202775.0%—
Product RevenueFY2027$5,660—
Product Revenue YoY GrowthFY202727%—

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Non-GAAP Adjusted Free Cash Flow Margin
FY2026
25%24%-1 percentage pointLowered
Product Gross Profit Margin (Non-GAAP)
FY2026
75%72%-3 percentage pointsLowered

Segment performance

Q4 FY2026
SegmentQ4 FY2026YoY
Product Revenue$1.227B+30.0%

Platform metrics

Q4 FY2026
SegmentQ4 FY2026
Net Revenue Retention Rate125%
Customers with $1M+ Trailing 12-Month Product Revenue733
Year-over-Year Growth in $1M+ Customers27%
Net New Customer Additions740
Year-over-Year Growth in Net New Customers40%
Remaining Performance Obligations (RPO)$9.77B
Year-over-Year RPO Growth42%

Profitability

Q4 FY2026
SegmentQ4 FY2026
Non-GAAP Operating Margin11%

Management tone

Q1 FY26 anchor → Q2 FY26 anchor → Q3 FY26 anchor → Q4 FY26 anchor: "AI as foundational pillar" → "AI as logo-acquisition engine" → "AI as quantified revenue stream" → "AI as platform-defining product cycle."

AI product disclosure has shifted from revenue milestones to product velocity. Last quarter's headline was the $100M AI revenue run-rate disclosure — a dollar number. This quarter the disclosures are about product penetration: 2,500 Snowflake Intelligence accounts (up from 1,200 in Q3, nearly doubling QoQ), 4,400 customers using Cortex Code. Sridhar relayed that customers and partners have been telling Snowflake they have not felt this level of excitement about a product since the original Snowflake was created — the most assertive product framing from management in eight quarters of coverage, even if delivered as customer voice rather than first-person declaration. The disclosure shift signals that the AI debate has moved from "is it real?" to "how fast does it propagate?" — which is consistent with the bull thesis maturing.

The largest-deal disclosure marks the first true enterprise-anchor moment. Through Q1–Q3 of FY26, management's positioning was incremental enterprise penetration. This quarter Sridhar disclosed the first $400M+ contract and seven nine-figure deals vs. two in prior year — concrete evidence that Snowflake has crossed into "strategic platform commit" territory at the largest customers, not just landing departmental footprints. The fact that the $400M deal was an existing financial services customer (not a new logo) is the most important detail: expansion at the top of the customer pyramid is where the FY27 growth durability case lives. Brian noted the deal was already in the run rate.

Management explicitly rejected the "comp plan tailwind" narrative. In response to JP Morgan's Mark Murphy questioning whether record bookings were driven by sales compensation adjustments, both Brian and Sridhar framed the comp change as a reversion to prior practice rather than a new incentive — i.e., the bookings strength is structural demand, not a pulled-forward incentive. This is a more defensive posture than in prior quarters and reflects the company's awareness that the +42% RPO growth invites a "what's the catch?" question.

Interoperability is now the central anti-disintermediation argument. Sridhar's response to Barclays' Sheldon McMean on agentic workflows laid out interoperability at every layer of the stack — Iceberg at storage, SQL/JDBC at query, semantic views at the model layer, and MCP-compatible Snowflake Intelligence agents — as the answer to "what if an agentic workflow runs elsewhere and needs Snowflake data?" The positioning: Snowflake doesn't have to be the agent runtime to capture the data workload.

Q&A highlights

Sanjit Singh · Morgan Stanley

Asked about durability of 27% growth guidance for FY27 given consumption model and strength in FY26, and requested update on data engineering revenue run rate and AI portfolio momentum entering FY27.

Brian emphasized guidance is based on observed customer behavior and high stable growth in core business plus growing AI workload contribution. Sridhar highlighted Snowflake Intelligence reaching 2,500 customers as major growth driver, and Cortex Code as game-changer enabling 10x+ faster development across data lifecycle.

27% FY27 product revenue growth guidance2,500 Snowflake Intelligence customers (nearly doubled QoQ)4,400 customers using Cortex Code1 percentage point growth contribution from Observe acquisition

Mark Murphy · JP Morgan

Requested details on the $400M+ record contract customer and characteristics, and questioned whether bookings drivers are sustainable or temporary given compensation plan adjustments and hiring surge.

Sridhar noted the largest deal was with an existing financial services customer, indicating Snowflake's maturity as durable provider. Both executives attributed strong bookings to customer confidence in product roadmap and AI strategy rather than temporary comp plan changes, emphasizing this represents reversion to historical practice.

$400M+ largest deal in company history from existing customerSeven nine-figure contracts signed in Q4 (vs two in prior year)$9.77B RPO growing 42% YoYComp plan adjustment was reversion to prior methodology, not new incentive

Brad Zelnick · Deutsche Bank

Asked what Snowflake will do differently in field execution in FY27 under Mike Gannon's go-to-market leadership to drive upside.

Sridhar emphasized that product excellence drives sales momentum, highlighting unprecedented excitement about Cortex Code from field teams. Christian noted Cortex Code delivers 10x improvement in ease of use vs original Snowflake value prop, enabling non-technical sellers to build applications.

Cortex Code described as most transformational product since original Snowflake launchSales force engagement metrics show highest excitement levels on recordField enablement focuses on Cortex Code capabilities for faster customer value delivery

Koji Leva · Bank of America

Asked about air pockets or underperforming segments within the $9.8B RPO growth, seeking explanation of any areas with lower-than-expected contribution.

Brian stated no significant underperformance areas were identified in Q4, attributing strong RPO growth to overall good sales execution and customer confidence in Snowflake's long-term strategy. Emphasized strong cross-functional execution by sales, VINs, and services teams.

No identified underperforming segments in Q4$9.77B RPO growing 42% YoY740 net new customers added (up 40% YoY)

Bill · Jefferies

Asked whether customers understand Snowflake's advantage of having Gemini, OpenAI, and Anthropic models available natively, and whether this differentiation is showing up in customer demand.

Sridhar positioned model availability as necessary but not sufficient, emphasizing Snowflake's core advantage is providing single source of enterprise truth with built-in security, governance, and trust. Noted that packaging multiple capabilities (Snowflake Intelligence + Cortex Code) into cohesive easy-to-use product is the real differentiator.

Multiple model providers integrated natively (OpenAI, Anthropic, Google Gemini)Emphasis on enterprise trust and governance as primary differentiators vs model availabilitySynergies between Snowflake Intelligence and Cortex Code shown as competitive advantage

Answers to last quarter's watch list

Whether Q4 product revenue beats $1.195–1.200B by at least ~$25M — Product revenue printed $1.227B, a $27M beat vs. the high end. That matches Q3's $28M beat almost exactly, confirming the "beat plus more" cadence is intact, not moderating.
Resolved positively
Whether the Q4 operating margin guide of 7% holds or surprises higher — Q4 operating margin printed 11%, a full 400bps above guide. The 7% guide was clearly sandbag absorbing optionality around the OpenAI commitment and AI investments. Operating leverage is structurally intact, not consumed by AI capacity buildup.
Resolved positively
AI revenue run rate progression beyond $100M — Management did not provide an updated dollar run-rate figure this quarter. Instead they disclosed product-penetration metrics: 2,500 Snowflake Intelligence accounts (nearly 2x QoQ) and 4,400 customers using Cortex Code. The disclosure framework has shifted; absence of an updated dollar number is mildly disappointing for those expecting quarterly cadence.
Not resolved
NRR break in either direction — NRR held at 125% for the fourth straight quarter. Neither broke above 127% (bull case) nor slipped to 123% (bear case). With four quarters of flat readings, the metric is now a plateau rather than a hold; the FY27 framing of 27% growth depends on either NRR breaking higher or new-logo additions continuing to accelerate (740 in Q4 supports the latter).
Continue monitoring
FY27 initial framing on the Q4 call — Delivered. FY27 product revenue guided to $5.66B (+27% YoY off the $4.47B FY26 base) with 12.5% non-GAAP operating margin and 23% adjusted FCF margin. FCF margin guidance of 23% (vs. 25% FY26 actual, including ~150bps headwind from the Observe acquisition) is the one cautionary signal but is explained by M&A rather than core deterioration.
Resolved positively

What to watch into next quarter

Whether Q1 FY27 product revenue beats $1.262–1.267B by at least $25M — Snowflake's "beat plus more" cadence has now held for five consecutive quarters. A sub-$20M beat would signal the consumption acceleration is finally moderating; a $40M+ beat would force a meaningful FY27 raise on the Q1 print.

Whether non-GAAP product gross margin holds the 75% Q1 FY27 guide — FY26 came in at ~76%, slightly above the 75% guide. The FY27 75% guide implies a modest step-down. A material slip below 75% would convert the small AI margin drag into a real structural concern.

NRR break in either direction — four consecutive quarters at 125% is now a plateau. With Snowflake Intelligence accounts doubling QoQ and Cortex Code at 4,400 customers, Q1 should start to show whether AI is genuinely incremental spend (NRR breaks toward 127%+) or budget reallocation (NRR drifts to 123%).

AI product revenue or penetration disclosure cadence — management broke from the $100M run-rate format this quarter in favor of customer-count metrics. Watch whether Q1 returns to a dollar disclosure or further entrenches the customer-count framing. The latter limits the ability to value the AI contribution.

Largest-deal cadence — seven nine-figure contracts in Q4 (vs. two prior year) is the standout data point of this print. Q1 disclosure of mega-deal count will indicate whether Q4 was a strategic catch-up or a sustained shift in deal mix.

Observe contribution disclosure — management called out ~1pt contribution from Observe to FY27 growth. Watch whether they break out Observe revenue separately or maintain the consolidated framing; the former would let analysts isolate organic Snowflake growth at ~26%.

Sources

  1. Snowflake Q4 FY2026 Press Release & Financial Statements — https://www.sec.gov/Archives/edgar/data/1640147/000162828026011631/fy2026q4earnings.htm
  2. Snowflake Q4 FY2026 earnings call Q&A (Sridhar Ramaswamy, Brian Robins, Christian Kleinerman)

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