Inframe News – Snowflake has raised its full-year revenue forecast after reporting stronger-than-expected quarterly results, as demand for its cloud data platform and artificial intelligence products continues to grow. The company announced the results on September 2, sending its shares more than 20% higher in after-hours trading.
The company now expects fiscal 2027 product revenue to reach $6.07 billion, up from its previous forecast of $5.84 billion. The revised outlook represents expected annual product revenue growth of about 36%. Snowflake also increased its projected non-GAAP operating margin for the year to 14.5%, from 13.5% previously.
Snowflake’s second-quarter performance was another major reason behind the stronger outlook. Product revenue increased 37% year over year to $1.49 billion, while total revenue rose 35% to $1.55 billion. Analysts had expected total revenue of around $1.48 billion.
The company also delivered better-than-expected adjusted earnings. Snowflake reported adjusted earnings of 62 cents per share, compared with analysts’ average estimate of 45 cents. The result helped reinforce investor confidence in the company’s ability to turn rising AI demand into higher revenue.
Artificial intelligence has become an increasingly important part of Snowflake’s growth. CEO Sridhar Ramaswamy said AI products contributed approximately half of the acceleration the company saw during the quarter. Snowflake’s strategy is centered on allowing businesses to store, process and use their data for AI applications through its cloud platform.
One of Snowflake’s AI tools, Cortex Code, surpassed 9,100 customer accounts during the quarter. The number increased by more than 2,000 accounts during the period. Its enterprise AI chatbot, CoWork, also expanded to 5,800 accounts.
Snowflake’s broader customer base is expanding as businesses continue moving older technology systems to the cloud. The company added 692 net new customers during the quarter, representing a 32% increase from a year earlier. Fourteen of those additions were companies included in the Forbes Global 2000.
The company also reported growth in long-term contracted business. Remaining performance obligations reached $9 billion, up 30% from the same period a year earlier. Snowflake’s net revenue retention rate stood at 126%, showing that existing customers continued increasing their use of the platform.
Snowflake has been positioning itself as an important infrastructure provider for companies developing AI applications. Rather than building and maintaining all of their own data infrastructure, businesses can use Snowflake to store and analyze large amounts of information before applying AI tools to that data.
The company is also benefiting from a broader shift toward cloud computing. Businesses are continuing to migrate legacy systems away from traditional data centers, creating additional demand for cloud-based storage and analytics. Snowflake’s management said this migration, combined with AI adoption, is supporting the company’s accelerating growth.
Snowflake’s relationship with Amazon Web Services is another important part of its infrastructure strategy. Earlier this year, the company signed a five-year agreement worth $6 billion with AWS covering Graviton processors and AI infrastructure. The partnership is intended to support Snowflake as demand for AI workloads increases.
For the third quarter of fiscal 2027, Snowflake expects product revenue between $1.588 billion and $1.593 billion. That would represent year-over-year growth of approximately 37% to 38%. The company is therefore expecting the recent acceleration to continue through the next quarter.
Investors reacted strongly to the results. Snowflake shares jumped more than 20% in extended trading following the earnings announcement, adding to a strong year for the company’s stock. The market response reflected growing expectations that enterprise AI adoption could continue driving demand for Snowflake’s data platform.
Snowflake’s latest results show how quickly AI is becoming connected to the broader cloud data business. With revenue growth accelerating, customer numbers increasing and its full-year forecast raised, the company is entering the rest of fiscal 2027 with stronger expectations for both its cloud platform and AI products.
