Q2 2027 Snowflake Inc Earnings Call Transcript
Key Points
- Product revenue grew 37% year-over-year, marking the third consecutive quarter of acceleration and the second straight record sequential-dollar growth.
- AI products (CoCo and CoWork) are driving rapid adoption, with CoCo surpassing 9,100 accounts and CoWork expanding to 5,800 accounts, contributing to a structural multiplier on platform consumption.
- Net new customer additions increased 32% year-over-year, including 14 new Global 2000 customers, bringing the total to 829.
- Non-GAAP operating margin expanded by over 400 basis points year-over-year to 15%, driven by strong revenue growth and disciplined headcount management.
- The company raised its full-year Product Revenue guidance to $6.07 billion (36% year-over-year growth) and increased non-GAAP operating margin guidance to 14.5%, reflecting strong demand and operational leverage.
- Internal use of AI (CoCo/CoWork) is driving significant productivity gains, such as reducing keyword research time from 10 hours to 20 minutes and cutting agency spend by $400,000 annually.
- Non-GAAP product gross margin guidance was lowered to 74% due to a higher revenue mix from fast-growing AI workloads, which carry lower contribution margins.
- The company remains dependent on AI products for growth, and if AI adoption slows or fails to meet expectations, it could impact overall revenue acceleration.
- RPO growth of 30% year-over-year is slower than product revenue growth, and bookings are increasingly weighted toward Q4, creating potential lumpiness in future revenue recognition.
- The company added only 334 employees year-to-date (including 173 from the Observe acquisition), which may limit capacity to support rapid growth and innovation.
- Despite strong growth, the company is not yet GAAP profitable, with GAAP profitability targeted only for Q4 fiscal 2028, indicating ongoing margin pressure from AI investments.
Good day and welcome to the second-quarter FY27 Snowflake earnings presentation.
Today's conference is being recorded.
At this time, I would like to turn the conference over to Katherine McCracken. Please go ahead.
Good afternoon and thank you for joining us on Snowflake's second-quarter fiscal 2027 earnings call.
Joining me on the call today are Sridhar Ramaswamy, our Chief Executive Officer; Brian Robins, our Chief Financial Officer; and Christian Kleinerman, our Executive Vice President of Product, who will participate in the Q&A session.
During today's call, we will review our financial results for the second-quarter fiscal 2027 and discuss our guidance for the third-quarter and full-year fiscal 2027.
During today's call, we will make forward-looking statements, including statements related to our business operations and financial performance.
These statements are subject to risks and uncertainties, which could cause them to differ
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