Snowflake hits $6B revenue with 37% growth and 126% NRR

The Gist

• Snowflake reports $1.49B product revenue, up 37% YoY
• Sequential revenue adds doubled to $158M in Q2 FY27
• AI products drive half of growth acceleration
• 126% NRR highlights strong customer retention

• Snowflake achieved a $6 billion run rate with 37% product revenue growth and 126% net revenue retention (NRR), showcasing significant acceleration.
• Snowflake's AI products contributed roughly half of the acceleration, while the other half came from increased core platform consumption.
• Snowflake's gross margin declined due to higher revenue mix from AI workloads, but operating margin increased due to slower headcount expense growth.
• Snowflake's customer base is increasingly concentrated, with 6% of customers accounting for 68% of product revenue.
• Snowflake's sales and marketing spend grew at 21.8%, significantly lower than its 35% revenue growth, indicating efficiency in scaling existing accounts.
• Snowflake's remaining performance obligations (RPO) grew 30%, with 54% expected to be recognized in the next twelve months.

• Focus on scaling existing accounts rather than acquiring new ones to drive efficient revenue growth.
• Invest in AI products that drive core platform consumption to accelerate revenue growth.
• Monitor gross margin impacts from AI workloads and offset them with operational efficiencies.
• Track remaining performance obligations (RPO) and net revenue retention (NRR) to understand revenue acceleration trends.

• 37% (Snowflake's product revenue growth in fiscal Q2 2027.)
• 126% (Snowflake's net revenue retention (NRR) rate.)
• 74.7% (Snowflake's non-GAAP product gross margin, down from 76.4% a year ago.)
• 15.3% (Snowflake's non-GAAP operating margin, up more than 400 basis points year over year.)
• 27% (Growth in the count of Snowflake customers with over $1 million in revenue.)
• 21.8% (Growth in Snowflake's sales and marketing spend against 35% revenue growth.)