Snowflake (SNOW) reported second-fiscal-quarter product revenue and full-year revenue guidance that significantly exceeded market expectations, while customer accounts for its AI coding assistant CoCo rapidly surpassed 9,000, indicating that generative AI capabilities are moving from early-stage trials to scaled production deployments. Although the RPO metric lagged in the short term and the company faces intense competition from rivals such as Databricks, the market responded positively to management’s AI monetization thesis, with the after-hours stock price rally confirming investors’ phased recognition of the integrated “data + AI” strategy. Going forward, the focus will center on whether AI-driven consumption trends can continue to accelerate, which will be the core variable determining whether Snowflake can solidify its competitive position.
For the second fiscal quarter ended July, Snowflake’s product revenue grew 37% year-over-year to $1.49 billion, exceeding the Bloomberg-compiled consensus estimate of $1.42 billion; total revenue reached $1.55 billion, up 35% year-over-year. The non-GAAP operating margin came in at 15.3%, with operating income of $237 million. Free cash flow was $83.8 million (5.4% margin), and adjusted free cash flow was $92.3 million (6.0% margin). On customer expansion, the company added 692 net new customers (up 32% year-over-year), the total number of customers with product revenue exceeding $1 million over the trailing 12 months reached 828 (up 27% year-over-year), and the number of Forbes Global 2000 customers increased to 829.
However, remaining performance obligations (RPO) came in at $9.0 billion, slightly below the market consensus of $9.37 billion. Some analysts noted that the temporary RPO shortfall may be related to contract renewal timing and the shift of certain large customers toward on-demand consumption models, rather than signaling weak demand. The company also emphasized that the number of new large enterprise customers added in the quarter maintained double-digit growth, and both customer retention rates and net revenue retention rates remained within healthy ranges.
According to the second-quarter fiscal 2026 earnings report (for the period ended July 2025), Snowflake expects full-year product revenue for the fiscal year ending January 2026 to reach approximately $6.07 billion, an increase from the previous guidance given in May and well above the average analyst forecast of $5.86 billion. Product revenue (primarily comprising cloud data warehouse, data lake, and AI platform subscription services) accounts for approximately 95% of the company’s total revenue and serves as a key metric for measuring the growth of its core business.
The AI product line stood out as the biggest highlight of the quarter. The company disclosed that its embedded AI coding assistant CoCo added more than 2,000 enterprise customer accounts using the product during the quarter, bringing the total number of cumulative using accounts to 9,100. Snowflake is deeply integrating generative AI into data governance, query optimization, and automated development workflows, aiming to enable non-technical users to complete complex data analysis through natural language interactions. Management emphasized during the conference call that CoCo’s adoption is reflected not only in customer counts but also in the sequential acceleration of consumption, demonstrating that AI capabilities have transitioned from “experimentation” to actual production-grade deployments.
As of the close of regular trading, Snowflake finished at $305.84, with a year-to-date gain of approximately 39%. The stock quickly surpassed $370 in after-hours trading, reflecting the market’s phased recognition of management’s AI monetization thesis.
